Downtown Calgary is not going to be the same as it was before the pandemic, let alone what it was like five or 10 years ago.
The city’s inner core, attractive but oh-so-work-focused will actually have to become more of a place where people want to hang out, live and spend their own money – not just swipe their corporate cards. And its branding has to change in a big way, too, according to a new plan to breathe life into the centre of the province’s largest city.
The Greater Downtown Plan was approved by Calgary City Council this week, along with an initial $200-million for incentives to lower the sky-high office vacancy rate, projects to make the area more lively and to start the first phase of a massive new build for multivenue arts centre Arts Commons. The document is timely, setting out the broad parameters for how to remake a downtown now in the throes of an identity crisis.
Rather than the office workers who once crowded into Stephen Avenue on sunny workday afternoons, Calgary will soon become more like other cities where residents and tourists generate activity and vibrancy, the plan notes. The blueprint for this revitalization includes major new public art, green space, transit projects and a downtown market.
It will take a lot to mitigate the emptiness created by the massive shedding of white-collar energy-sector jobs in recent years. To attract new industries, workers and residents, old ideas of what Calgary’s downtown is will also have to fall by the wayside.
“It will take a bold and focused strategy to overcome the perception that our downtown is an expensive office market that caters to the oil-and-gas and head-office market,” the downtown plan reads.
“Investors currently don’t see the downtown core as a future-focused and thriving district, even though it has made considerable progress over the past 10 years. We need to get our downtown noticed and on the radar of investors. If not, we will get left behind other cities that have stronger brands and reputations as cities for the next generation and the new economy, such as Austin, Texas, or Nashville, Tennessee.”
The gleaming glass and steel buildings (and weather) might stand in the way of Calgary becoming a hipper, come-hither Western city such as Austin or Nashville. But still, “we have to make sure this is a cool city,” said Scott Hutcheson, executive chair of Aspen Properties, which owns and manages a suite of key office towers in downtown Calgary and Edmonton.
“The brand has been eroded,” Mr. Hutcheson said. “When you have a shrinking employment base for seven years, you can’t deny that’s a troubling economic problem.”
Calgary now needs to hustle. Long gone are the days when the city attracted head offices and people based on high oil prices and new companies and projects. Oil and gas hasn’t disappeared – and won’t. There will be new jobs in related carbon-capture, renewable and net-zero industries. But a downtown built for ever-expanding investment in oil isn’t a thing any more.
Not only can the city not count on future oil and gas jobs to fill the overwhelming number of empty office towers, but other downtown businesses like restaurants and shops will not be able to lean on the prior massive economic weight of that sector. The future economy “needs to include sectors like agribusiness, creative industries, energy and environment, technology and many more,” the new plan points out.
The plan is, in large part, about finding a way to manage an enormous, unwieldy amount of unused square footage.
All downtowns have been hit by the pandemic, and the ensuing retreat to working from home. But the problems in Calgary started long before 2020, with consolidation in the energy sector and ongoing impacts on the industry. The city says downtown office property values have dropped by 60 per cent in the past six years. Greg Kwong, vice-president and regional managing director for commercial realtor CBRE and a guru of downtown Calgary real estate, said there are now eight downtown office buildings sitting completely empty – up from his count of six last year. The decline has laid waste to the municipal government’s long-standing reliance on property taxes downtown.
Downtown vacancy currently sits at about 30 per cent. The city’s new goal, much more ambitious than it sounds, is to bring vacancy down to 14 per cent in the next 10 years. It will take at least that long to put Calgary’s vacancy rate to something nearing more-normal city levels.
It will mean demolitions of some buildings, and more success attributable to the province’s (controversial) corporate tax cuts, and some luck in beating the drum about the revitalization plan for new companies to come here. It will mean conversions of old office buildings into boutique hotels – or, as noted in the Calgary Herald this week, the conversion of the old Dome Petroleum headquarters into a housing project.
It will also mean more in the way of museums, playgrounds and parks, new facilities for postsecondary institutions, and a few quirky stores that can’t be found anywhere else.
The boosterism Calgary is so good at needs to be clear-eyed. The 10-year downtown plan requires $1-billion in spending, and there will be big asks for cash to the province and the federal government. There should be transparency and healthy doses of skepticism at every turn.
But it’s not a great option to let aging buildings just sit empty, and to get more run down. And for anyone to see downtown Calgary as an urban destination – whether that’s investors from outside the city, or day-trippers from the suburbs – there will have to be much more, especially in the way of intangibles.
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